Why Shale Development is So Important to U.S. Consumers
The importance of shale development seems like a no brainer to most, providing economic prosperity, jobs and energy security for our future. But what it has also done, and which has been rarely mentioned, is provide enough natural gas to ensure our economy didn’t take a huge step in the wrong direction following this winter’s blistering cold – a winter so cold that the United States set a record high for natural gas demand in January.
Without responsible shale development, it is hard to tell where we would be when the United States needed an average of 90.6 billion cubic feet of natural gas per day this winter. In January alone, the United States used over 3.2 trillion cubic feet to meet our energy needs, according to a recent Energy Information Administration report. This is a 53 percent increase from January 2006, when the United States only used 68.3 billion cubic per day.
Even with that record high use, natural gas prices barely broke $6 per mcf, helping low income families and small business make it through the winter without losing their homes or closing their businesses. That price stability traces itself directly to the abundance of natural gas made possible by shale development throughout the United States.
To put this all into perspective, in 2012 shale gas production in the United States averaged 25.7 billion cubic feet per day (Bcf/d), or 39 percent of the total daily production of natural gas nationwide. If the United States did not have shale development, the United States likely would have only produced 40 billion cubic feet of natural gas per day, leaving the United States to potentially import natural gas from other countries to meet our demand. Imported gas often costs more than domestically produced gas, so the result would be an increased price for natural gas.
Moreover, the reason we can meet our natural gas demand in the winter is because of our substantial underground natural gas storage facilities. Every year following the winter months, the natural gas that is not used for residential, commercial and industrial purposes (i.e. heating) is used to refill the United States’ substantial storage facilities. Over 3.8 trillion cubic feet of natural gas is placed into these underground storage facilities during the spring, summer and fall seasons to help manage the winter months’ increased need for natural gas.
During normal winters, the United States is able to fair pretty well with our storage capacity. Unfortunately, this year was one of the coldest winters on record, leading to our storage fields being reduced to 800 billion cubic feet.
Without shale development, it would extremely difficult, if not impossible, to refill our storage capacity to 3.8 trillion cubic feet without importing natural gas from other countries, shipping dollars overseas instead of investing them domestically. In order to enjoy a growing economy, energy prices must remain low enough to encourage investment. Thankfully, shale development is helping provide the low cost energy to get our economy back on its feet – cleaning the air and strengthening our energy security in the process.